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Record labels are upset over Amazon's Cloud Drive announcement when the online retailer failed to address license-related negotiations

Just yesterday, Amazon announced its new cloud-based storage service called Cloud Drive, which is quite a feat considering the online retailer jumped ahead of huge tech companies like Apple and Google in the race for music streaming services. But now, the music industry is stepping in, and could possibly slow Amazon's progress.  

Cloud-based music storage has become a popular option for those who use multiple devices. For companies like Amazon, this method of music streaming is a great alternative to relying on CD sales. While other companies continue working on their versions of cloud-based services, such as Apple's MobileMe music component called a "locker," and Google's music service that was rumored to be released with the new Honeycomb launch (but reports are now saying that Google execs are still in the midst of chatting with record labels), Amazon leaped ahead of the game with Cloud Drive, which offers 5 GB of online storage for free and saves album or MP3 purchases to the cloud automatically.

Customers can upgrade to 20 GB of space by purchasing an MP3 album. Also, the Cloud Player allows users to play their music through a PC, Mac or Android-based phones. However, those with an Apple iPhone cannot partake in Amazon's new service.

But now, Amazon may be running into some trouble with record labels, like Sony Music, who was angered by Amazon's new service launch "without new licenses for music streaming." 

"We hope that they'll reach a new license deal," said Liz Young, a spokeswoman for Sony. "But we're keeping all of our legal options open."

Record labels were informed of the new Amazon service last week, and Amazon had not yet addressed license-related negotiations at that point. An executive close to the Amazon discussions, who preferred to remain anonymous due to the confidentiality of the discussions, noted that Amazon's new service might be considered illegal to those in the music industry.  

"I've never seen a company of their size make an announcement, launch a service and simultaneously say they're trying to get licenses," said the executive. 

While users are allowed to store music files on their own computers, it is "unclear whether they have that right when they use remote storage services offered by cloud computing." 

A similar situation occurred in 2007 when EMI sued MP3tunes because they offered a service similar to Amazon's.  

"The labels have engaged in a legal terror campaign over the last 10 years using litigation to try and slow technology progress," said Michael Robertson, MP3tunes founder, regarding the Amazon situation.

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Gotta love it
By FITCamaro on 3/30/2011 10:18:11 AM , Rating: 5
What the hell should it matter where you store it after you buy it. Just another example of record labels essentially encouraging people to pirate by trying to punish legal purchasers of music.

RE: Gotta love it
By cjohnson2136 on 3/30/2011 10:20:24 AM , Rating: 2
That was one of the things I was a little puzzled about the service and maybe someone could clear it up. Is Amazon just offering storage space where you buy the music and Amazon holds it or is it more streaming like Pandora or Zune?

RE: Gotta love it
By nafhan on 3/30/2011 10:56:44 AM , Rating: 3
Works like this:
-Amazon user buys music from Amazon or uploads already owned music
-Music gets saved to the Amazon user's cloud storage account
-Amazon provides an interface to stream the user's music to Android devices or web browsers
-Notably, the user still has full access to the files and can download or upload them at will

Amazon is essentially providing you with online storage, an "app" that lets you stream music from your online storage, and simple methods to get new or already owned music into that online storage. They're giving you another way to get at your own stuff, basically. With true streaming services (i.e. Pandora) you never "own" any of the music files.

RE: Gotta love it
By bighairycamel on 3/30/2011 11:22:42 AM , Rating: 2
From what I understand you can also download that music to any PC as long as you can access your Amazon account. This is probably where the mafRIAA will have a bitch-fit.

Also, why the hell would Amazon have to pay license fees to stream music already purchased and "owned" by a user and not streaming to the general public. That would be double dipping.

RE: Gotta love it
By zmatt on 3/30/2011 11:43:31 AM , Rating: 5
because as the RIAA has said in court cases before, they don't sell you the music, they sell you a license to listen to it on the medium you purchased it. i remember a year or two ago they tried to get ripping cd's and putting the mp3s on your mp3 player illegal, because they didn't "license" you to transfer the music form a cd to a digital device. Obviously they are nuts and this flies in the face of the concept of ownership.

RE: Gotta love it
By HrilL on 3/30/2011 2:09:29 PM , Rating: 2
Normal Audio CDs don't have DRM and thus you have the legal right to rip them under the DMCA because we always had this right in copyright law. It is called fair use. In the case of buying MP3 files directly and storing them online this should be considered perfectly legal as well.

A similar case was with The Comcast remote DVR. This proved in court that it doesn't matter where the media is stored as long as the user has a legal right to the content. While TV show and movies are slightly different. Time shifting is legal and it was ruled that it doesn't matter if the device is in your house or at a services providers location.

Amazon should be in the clear here and thus needs no licensing agreements. Where it could possibly get tricky would be if each account doesn't actually store its own music files. For example a lot of people will have songs purchased from Amazon and thus they'd only really need to store one copy of it and let all the users that own it have access but even trying a case of that would be a stretch since each user does in fact own the file in question and the courts would have to be filled with morons if they think the same bits are any different because they are owned by someone else.

RE: Gotta love it
By Solandri on 3/30/2011 2:12:46 PM , Rating: 5
because as the RIAA has said in court cases before, they don't sell you the music, they sell you a license to listen to it

This is the part most people have no problem with.
on the medium you purchased it

This is the part that makes absolutely no sense. They're selling me a license to read data off the media? WTH? I don't care about the media. I just want the data.

Their continual efforts to try to tie the data (music, movies, books) to the media are what's killing their business. By actively ignoring media-less distribution, they allowed iTunes, Netflix, and Amazon/Barnes & Noble to grab the lead in online sales and distribution. If you ignore market demand, your business deserves to die.

RE: Gotta love it
By nafhan on 3/30/2011 11:51:06 AM , Rating: 3
Yep, from a file point of view, it's just another place to have your stuff stored. Everything that Amazon is doing here, you could have done with any MP3 even before they rolled out these services. Amazon's just making it easy.

Requiring a streaming license seems ridiculous. You're just playing back your own files, it shouldn't matter if there's a network transit in between you and your file.

RE: Gotta love it
By Natfly on 3/30/2011 11:43:13 AM , Rating: 2
Which is exactly what you can already do with software like Orb and others. Have a central repository with the ability to stream anywhere you want.

RE: Gotta love it
By cjohnson2136 on 3/30/2011 1:12:50 PM , Rating: 2
Ok then I don't get what the record companies have an issue with. The user still has to buy the music. Amazon is simply giving the tools to play and store the music not get content.

RE: Gotta love it
By MeesterNid on 3/30/2011 10:41:01 AM , Rating: 5
I just hope all these tactics keep tanking their revenue and perhaps sometime in the future record labels will just cease to exist and people will just buy music straight from the artists.

RE: Gotta love it
By LRonaldHubbs on 3/30/2011 10:45:20 AM , Rating: 3
Agreed. I like what Radiohead is doing -- releasing their albums directly through their own website. I hope more bands will follow suit.

The other thing I like that Radiohead has done is offer 24-bit FLAC as an alternative medium. If you haven't heard about this, look for their new album on

I'm not even a fan of Radiohead, as I'm mostly into metal, but I bought their new album solely as a 'yes' vote to their distribution methods.

RE: Gotta love it
By Mitch101 on 3/30/2011 11:18:38 AM , Rating: 2
Nine Inch Nails does the same lets hope all major recording artists do the same.

From what I understand the artists make about 5% of the sale of their music when going through a major label.

If thats true then selling direct to the consumer could cost significantly less than a buck a tune and make the recording artist a lot more money.

RE: Gotta love it
By LRonaldHubbs on 3/30/2011 10:41:50 AM , Rating: 3
Exactly. If I buy MP3s and download them to my computer, nothing stops me from signing up for a account, uploading my MP3s to the cloud, and accessing them when and where I want. All Amazon did was simplify this by offering their own cloud hosting service. The record labels are just being greedy as usual. Any time audio content moves anywhere for any reason they want a cut. I hope the record labels lose this battle.

RE: Gotta love it
By Uncle on 4/1/2011 3:09:25 PM , Rating: 2
Sorry to disappoint you, but Amazon will cop a deal with the Music industry. Amazon will not take a chance and lose any future deals with the music industry because the Music industry will not renegotiate Amazon selling their music. Amazon will probably sign some NDA and pay the music industry a few pennies per download and put it in the cost of the goods you buy from them, and have the consumer think how nice Amazon is to allow you to store your music in the clouds so you come back as a repeat customer.

RE: Gotta love it
By amanojaku on 3/30/2011 10:49:12 AM , Rating: 2
It matters a whole hell of a lot because of how the industry distributes electronic music. Services like the iTunes Store and Zune Marketplace use a variety of mechanisms to restrict software distribution, among them user account names and device IDs. For example, you, FITCamaro, have purchased Def Leppard's "Pour Some Sugar On Me" from the iTunes store and the fascists dictate it can only run on the iPod with the serial number xxxxxxxxxx. Buy a new iPod and you have to reset the device ID associated with the account. And maybe it's me, but iPods tend to get wiped and re-synched a lot by iTunes. My guess is to prevent you from storing files that you've obtained from outside of the paid store (i.e. your friends). The level of remote control over your device is just frightening.

Now, with Amazon's scheme you don't have the restriction of a device. You can play your songs through a web browser (like a store playing songs over a loud speaker, which requires a license), or on any Android phone. Pretty much anyone can connect to your account and get stuff. The record companies don't like that.

As an aside, I think it's HILARIOUS that Apple devices are not supported! My guess is the web player uses Flash. :-)

RE: Gotta love it
By LRonaldHubbs on 3/30/2011 10:58:17 AM , Rating: 4
Amazon's mp3 store already does not have these limitations though. If you buy an mp3 from Amazon today, it lets you download the file to your hard drive and that is it, there is regulation of how, when, where you can use that mp3.

The only change with this new announcement is that they will host your mp3 in the cloud for you. For someone else to access your songs they would need your account information. But that's exactly how it is today regardless of this new announcement. If I gave you my account info, you could log on and download any songs that I have ever bought from Amazon with no charge. The cloud streaming will make this easier to do, but effectively it's the same thing.

The record labels just want to treat this like other streaming services (despite the fundamental difference that you are streaming something you already own) so that they can charge more fees. It's as simple as that.

RE: Gotta love it
By PitViper007 on 3/30/2011 2:57:01 PM , Rating: 3
For someone else to access your songs they would need your account information. But that's exactly how it is today regardless of this new announcement. If I gave you my account info, you could log on and download any songs that I have ever bought from Amazon with no charge.

Umm, not exactly. When you buy a digital song (or album) from Amazon, you get to download it ONCE. Once you've done that initial download, you can't download it again. They do NOT allow you to redownload your library again anytime you want, which is one of the few things I don't like about Amazon's music store.

RE: Gotta love it
By LRonaldHubbs on 3/30/2011 3:46:16 PM , Rating: 2
You're absolutely right. You can only download Amazon mp3s once.

I had seen in my Amazon media library, that if I clicked the 'Downloads' tab, it showed a list of my mp3s, and each of them had a 'Download' button on the right hand side. I thought that meant I could re-download them, but had never actually tried it. Now that I just tried it, I see that it only redirects me to a page which says that I've already downloaded that file. WTF Amazon???

So as you pointed out, I was mistaken on this. Thanks for the correction.

Fortunately the only mp3s I've obtained through Amazon were free promotions from CDs that I bought, otherwise I'd probably be pissed about that...

RE: Gotta love it
By ImEmmittSmith on 3/30/2011 4:28:49 PM , Rating: 2
One caveat to the only Once download thru Amazon you may not know, is that if you make a request for a song or album that is damaged(or not) they will allow you to download it again. I have several albums/songs that Amazon has given me access to again and the download button has never gone away. All you have to do is ask! :o)

RE: Gotta love it
By brybir on 3/30/2011 10:59:20 AM , Rating: 2
Except the fact is that when I buy an MP3 from Amazon, I am downloading a real, validated and working MP3 file that I can do whatever the hell I want with it.

Other posters have pointed out that I can sign up for dropbox or any other hosting site, move my MP3 to that site, and stream it to the cloud in any way that I please and I am perfectly within my rights.

All Amazon is doing is giving me the option to have my MP3's, that I could otherwise download and DO WHATEVER I WANT WITH THEM, to be placed in my cloud ahead of time.

The only reason the record companies think that this is against some terms and agreements is because they see streaming music as distint from buying and downloading a music, i.e. the difference between the zune marketplace $10 all song you want and your 99 cent amazon downloads. The difference being, to the labels, they will charge MS a very small fee per song (say 3 cents) per song streamed, because you dont get to keep it and so they make money over time as you listen to songs repeatedly or even go out and buy the song later at full price. I imagine the labels see this and say, oh no they are getting to download the song AND get free streaming of the song as well, and we did not negotiate that with Amazon, and because we always get extra revenue for streaming as opposed to downloading, we are missing our share of the money.

My opinion is that this is nothing more than a contract dispute, it is not a question of "rights", but, what did the labels and Amazon sign in their contract about streaming. My guess is the contract has a few pages talking about streaming music being seperate, and basically Amazon is saying this is NOT streaming as discussed above, merely storage that happens to have a player in it, so it is not covered by the contract. But, without copies of the contract, it is hard to know.

Realistically, this was a very smart move from Amazon. They needed an edge to keep up competitively with Apple, and this just provided them a large innovation that Apple that does not have and that many people, like me, are excited about. I'm just suprised Google did not offer it sooner.

RE: Gotta love it
By cochy on 3/30/2011 11:58:26 AM , Rating: 3
The only reason the record companies think that this is against some terms and agreements is because they see streaming music as distint from buying and downloading a music

In other words, the record companies are clueless. Old news.

RE: Gotta love it
By kraeper on 3/30/2011 2:28:00 PM , Rating: 1
For the record, having an mp3 file does not give you the legal right to "DO WHATEVER I WANT WITH THEM". For example, you cannot broadcast it in public, you cannot upload it to bittorrent, you cannot give copies to friends, etc etc etc. Sure the technology exists, but that does not give you the legal right to use it.

Yes I hate record companies, yes this 'dispute' is all about money, and I hope they lose this (currently non-existent) case, but "I can already do that!" isn't a valid legal defense. Owning a gun does not give you the legal right to shoot whomever you'd like either.
Just sayin.

RE: Gotta love it
By nafhan on 3/30/2011 11:07:15 AM , Rating: 2
It actually hasn't worked that way in years. Amazon only sells MP3's and most stuff in iTunes is DRM free as well.

IMO, the best part about what Amazon is doing here is making it very difficult to accidentally lose your music due to a synching problem, hard drive crash, lost iPod, etc. Music gets saved into the user's personal cloud storage where it can be re-downloaded at any time. I think the music industry has been benefiting from people repurchasing digital music, and this could largely put a stop to that.

RE: Gotta love it
By kattanna on 3/30/2011 11:35:51 AM , Rating: 2
As an aside, I think it's HILARIOUS that

you have pictured fit driving along singing to pour some sugar on me

thats an image thats making me chuckle


RE: Gotta love it
By FITCamaro on 3/30/2011 1:12:02 PM , Rating: 2
Great song for chicks to strip to.

RE: Gotta love it
By theapparition on 3/30/2011 1:39:22 PM , Rating: 4
Then why would you need it.


RE: Gotta love it
By tng on 3/30/2011 5:22:07 PM , Rating: 1
And maybe it's me, but iPods tend to get wiped and re-synched a lot by iTunes. My guess is to prevent you from storing files that you've obtained from outside of the paid store (i.e. your friends).
I have other libraries on my Ipod and they work just fine, but they were ripped from CDs, never tried someone else's downloads from Itunes.

I also wonder about the amount of remote control, it seems that there is a software update for the player and the pod every 2 weeks from Apple, and I have a 5 year old, 30GB player.

I also will say that I love my Ipod, but hate Itunes. I have become an expert at reloading my libraries since it seems that Itunes has a tendency to wipe them out periodically via software updates and who knows what (last time I opened the application and after it came up there was nothing there anymore).

I find it pathetic that Apple can't seem to get it right, as much as I bitch about MS, I don't have as many problem with Vista as I do with Apple software.

Sorry, end rant....

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